After a respite yesterday, the market is gettng merc’d today, much to the chagrin of the hopeful bulls. There is just too much weight and momentum backing the Bearish Camp (as opposed to the “Bullish Camp”, aka “Camp Stupid”).
Housing starts fell 16 percent last month to an annual rate of 550,000 that was less than forecast and the lowest since the government started compiling statistics almost 50 years ago, a Commerce Department report showed. Initial jobless claims increased by 62,000 to 589,000, more than forecast, in the week ended Jan. 17, from a revised 527,000 the prior week, according to a Labor Department report.
We also have credit risk increasing by leaps and bounds, not only in the private sector, but also the public sector. You think some people are worried? “Bank bailout plans in the U.S. and the U.K. are leading investors to buy contracts that provide insurance on the debt of the two nations”, said Hideo Shimomura, chief fund investor at Mitsubishi UFJ Asset Management Co. in Tokyo.
According to Bloomberg, CDS on five-year U.S. govt. securities climbed to 60 basis points, the highest level since they started tracking the data. That means an investor would need to pay a record $60,000 to protect $10 million of debt. For the U.K., the contract rose to 1.47 percentage points, the most ever, from 1.07 percentage points at the start of the year, according to data compiled by Bloomberg. People are betting, and upping the ante, that the US and the UK may default on their debt now. No big deal. The US govt can just keep printing money and bailout the economy as they go their merry way, right?
It’s all about to come down this year. This stupid bailout mentality is going to drag the whole system down. Get ready to get poorer because socialism is just a few Executive Orders away.
Hideous.
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